The Hottest Sector to Find Beaten-Down Value

This week in Stansberry Investor Hour, Dan and Corey are joined by their Stansberry Research colleague, Bryan Beach. Bryan is the editor of Stansberry Venture Value, which is Stansberry's small-cap value newsletter. Dan and Corey kick off the podcast by dissecting the latest in the market, starting with the recent Republican political debate and Federal Reserve Chair Jerome Powell's presence in Jackson Hole, Wyoming. (00:00)

Bryan then joins the conversation to break down his value-investment approach. This approach extends across industries and is guided by the pursuit of "value nuggets." One of Bryan's central investing tenets involves identifying companies that have experienced significant declines in value. And right now, the Software as a Service ("SaaS") space is a prime example of such undervaluation. (20:53)

The conversation then shifts to Bryan's previous role as an accountant. He recalls Wall Street's historical inclination toward upfront software-purchase models, which encompassed future maintenance packages and fees. But Salesforce changed all that in the early 2010s by reshaping the software landscape. The transition toward the SaaS model gained remarkable traction between 2015 and 2021. (27:50)

More recently, SaaS companies have experienced a downturn in popularity. But Bryan sees this as an opportunity. Bryan and Dan go into how if Warren Buffett were a young investor today, he would likely be captivated by the software sector. The two draw connections between Buffett's historical interest in newspapers and the appeal of software business today. Bryan highlights their affordability and upward momentum, making them prime investment candidates. (46:00)

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